Science and Technology Reinvention Laboratory Personnel Management Demonstration Project, Department of the Army, Army Research, Development and Engineering Command, Natick Soldier Research, Development and Engineering Center (NSRDEC), 68448-68475 [E9-30478]

Agencies

• Office of the Secretary
• DEPARTMENT OF DEFENSE

[Federal Register Volume 74, Number 246 (Thursday, December 24, 2009)]
[Notices]
[Pages 68448-68475]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30478]



[[Page 68447]]

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Part II





Department of Defense





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Office of the Secretary



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Science and Technology Reinvention Laboratory Personnel Management 
Demonstration Project, Department of the Army, Army Research, 
Development and Engineering Command, Natick Soldier Research, 
Development and Engineering Center (NSRDEC); Notice

Federal Register / Vol. 74, No. 246 / Thursday, December 24, 2009 / 
Notices

[[Page 68448]]


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DEPARTMENT OF DEFENSE

Office of the Secretary


Science and Technology Reinvention Laboratory Personnel 
Management Demonstration Project, Department of the Army, Army 
Research, Development and Engineering Command, Natick Soldier Research, 
Development and Engineering Center (NSRDEC)

AGENCY: Office of the Deputy Under Secretary of Defense (Civilian 
Personnel Policy), (DUSD (CPP)), Department of Defense (DoD).

ACTION: Notice of approval of a demonstration project final plan.

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SUMMARY: Section 342(b) of Public Law 103-337, as amended, authorizes 
the Secretary of Defense to conduct personnel demonstration projects at 
Department of Defense (DoD) laboratories designated as Science and 
Technology Reinvention Laboratories (STRLs). The above-cited 
legislation authorizes DoD to conduct demonstration projects to 
determine whether a specified change in personnel management policies 
or procedures would result in improved Federal personnel management. 
Section 1107 of Public Law 110-181 as amended by section 1109 of Public 
Law 110-417 requires the Secretary of Defense to execute a process and 
plan to employ the Department's personnel management demonstration 
project authorities found in title 5 United States Code (U.S.C.) 4703 
at the STRLs enumerated in 5 U.S.C. 9902(c)(2) as re-designated in 
section 1105 of Public Law 111-84 and 73 Federal Register (FR) 73248 to 
enhance the performance of these laboratories. The NSRDEC is listed as 
one of the designated STRLs.

DATES: Implementation of this demonstration project will begin no 
earlier than February 1, 2010.

FOR FURTHER INFORMATION CONTACT:
NSRDEC: Ms. Karen Sullivan, Natick Soldier Research, Development and 
Engineering Center, (RDNS-BOW), Kansas Street, Natick, MA 01760, (508) 
233-4479.
DoD: Ms. Betty A. Duffield, CPMS-PSSC, Suite B-200, 1400 Key Boulevard, 
Arlington, VA 22209-5144

SUPPLEMENTARY INFORMATION:

1. Background

    Since 1966, many studies of Department of Defense (DoD) 
laboratories have been conducted on laboratory quality and personnel. 
Almost all of these studies have recommended improvements in civilian 
personnel policy, organization, and management. Pursuant to the 
authority provided in section 342(b) of Public Law 103-337, as amended, 
a number of DoD STRL personnel demonstration projects were approved. 
These projects are ``generally similar in nature'' to the Department of 
Navy's ``China Lake'' Personnel Demonstration Project. The terminology, 
``generally similar in nature,'' does not imply an emulation of various 
features, but rather implies a similar opportunity and authority to 
develop personnel flexibilities that significantly increase the 
decision authority of laboratory commanders and/or directors.
    This demonstration project involves: (1) Two appointment 
authorities (permanent and modified term); (2) extended probationary 
period for newly hired engineering and science employees; (3) pay 
banding; (4) streamlined delegated examining; (5) modified reduction-
in-force (RIF) procedures; (6) simplified job classification; (7) a 
pay-for-performance based appraisal system; (8) academic degree and 
certificate training; (9) sabbaticals; and (10) a Voluntary Emeritus 
Corps.

2. Overview

    DoD published notice in 73 FR 73248, December 2, 2008, that 
pursuant to subsection 1107(c) of Public Law 110-181 the three STRLs 
listed in 5 U.S.C. 9902(c)(2) as re-designated in section 1105 of 
Public Law 111-84 not having personnel demonstration projects may adopt 
any of the flexibilities of the other laboratories listed in subsection 
9902(c)(2) as re-designated in section 1105 of Public Law 111-84 and 
further provided notice of the proposed adoption of an existing STRL 
demonstration project by two centers under the United States (U.S.) 
Army Research, Development and Engineering Command (RDECOM): Edgewood 
Chemical Biological Center (ECBC) and NSRDEC. The notice indicated that 
these two centers intended to adopt the STRL Personnel Management 
Demonstration project designed by the U.S. Army Communications-
Electronics Command, Research, Development, and Engineering 
organizations (a reorganization changed this designation to the U. S. 
Army Communications-Electronics Research, Development and Engineering 
Center (CERDEC)). Relative to NSRDEC's intent to adopt the CERDEC 
demonstration project, DoD received written comments from 5 
individuals, including a union official, during the public comment 
period which ended on January 2, 2009. In addition, one individual 
provided comments after the close of the comment period. All comments 
were carefully considered. The comments received after the close of the 
comment period are not included in the summary below, but were 
discussed with the individual who provided the comments.
    The following summary addresses the pertinent comments received, 
provides responses, and notes resultant changes to the original CERDEC 
project plan published in 66 FR 54872, October 30, 2001. Several 
commenters addressed more than one topic and each topic was counted 
separately. Thus, the total number of comments exceeds the number of 
individuals cited above.

A. Miscellaneous

    Four miscellaneous comments were received.
    Comments: Two commenters provided favorable comments on the 
expected benefits to NSRDEC as a result of the demonstration project 
and on the value of pay banding to retain and reward high performers. 
Two other comments reflected the need to make revisions and other 
adjustments in the document to reflect NSRDEC and its workforce and to 
make other updates for legal and regulatory changes that have occurred.
    Response: A number of changes were made to include NSRDEC as the 
name of the organization, its organizational and workforce information, 
approval authorities, and technical modifications to conform to changes 
in the law and governing regulations. In addition, some sections have 
been reformatted for clarity and to improve readability. Throughout the 
document changes have been made to clarify and provide consistent use 
of pay terminology. Minor revisions have been made to Appendix C, 
Performance Elements, to be consistent with the descriptions currently 
in use by CERDEC.

B. Pay Bands

    Two comments were received concerning pay bands.
    Comments: One commenter advised that reconsideration be given to 
initial placement of all GS-14 engineers and scientists to the 
Engineering and Scientist (E&S) (DB) Pay Band IV and requested 
clarification of how any subsequent conversions for GS-14 E&S positions 
will be handled. Another comment suggested that the number of Pay Band 
V positions be expanded to permit a certain number or percent at each 
STRL since the current limited number has already been allocated to 
other organizations which would preclude NSRDEC from using this 
flexibility.

[[Page 68449]]

    Response: We have carefully considered these comments. With regard 
to placement of GS-14 E&S, language has been changed in III.A.1. and 
added in III.A.2. to reflect that upon conversion NSRDEC employees in 
the E&S family at grade GS-14 will be assigned to Pay Band IV.
    In response to the second comment, the use of Pay Band V has proven 
to be beneficial in recruiting and retaining highly-qualified senior 
scientific technical managers in those STRL personnel demonstration 
projects that have such positions. The limited number of such positions 
makes it difficult to meet the requirements of all the STRLs who wish 
to use this flexibility. The DoD is currently reviewing all Pay Band V 
positions. No change is proposed in the number of Pay Band V positions 
pending the completion of the DoD review.

C. Pay for Performance

    Five comments were received related to the pay-for-performance 
system.
    Comments: One commenter expressed concern that performance and pay 
related decisions of supervisors could be personality-driven and that 
employees did not have sufficient trust in their supervisors to 
increase the authority of supervisors to make pay-related decisions. 
Another commenter expressed concern that pay for performance will 
undermine organizational performance. The commenter has not been able 
to identify performance management experts that support rating/ranking 
of employees. The commenter emphasized the importance of assuring that 
performance objectives provide a consistent level of challenge and 
urged adding a level of employee oversight for balance. Another 
commenter considered that the proposed system is no less subjective 
than the present system. Finally, another commenter was concerned that 
adoption of the demonstration project pay-for-performance system would 
adversely affect mobilized reservists and guardsmen.
    Response: As cited by the commenter, a recent Merit Systems 
Protection Board survey suggests that, across the Federal government, a 
number of survey respondents lack trust that their supervisors will 
treat them fairly. Workforce support is crucial to the success of the 
demonstration project, and a concerted effort will be made to build 
trust and confidence in the demonstration project. On-going 
communication with the workforce is eliciting their opinions. A cross-
section of employees participate in a Workforce Advisory Group and are 
actively involved in identifying training needs and developing 
operating procedures. Training in the pay-for-performance system and 
other aspects of the demonstration project will be mandatory for all 
supervisors. The use of a structured reconciliation process to 
determine performance payouts will facilitate enhancing fairness and 
consistency. The process provides for raters to conduct a review, 
comparing preliminary scores and building consensus to achieve 
consistent ratings across the pay pool. Finally, perceived fairness of 
the appraisal process has been identified as an area for evaluation and 
will be included in surveys of the workforce and focus group 
discussions with employees. An annual report with a thorough review and 
analysis of the pay-for-performance cycle will be published to assist 
in providing greater transparency. Active outreach combined with the 
structured reconciliation process and transparency will help to build 
the trust necessary for successful implementation.
    Improving organizational effectiveness is the driving goal 
supporting implementation of the laboratory personnel demonstration 
project. The Office of Personnel Management (OPM), in its independent 
evaluation of STRL personnel demonstration projects, found a limited 
but positive impact of implementation of a demonstration project on 
laboratory effectiveness. All STRL demonstration projects include a 
pay-for-performance system as a means to achieve improved 
organizational effectiveness. Though there are difficulties with 
performance reviews, such reviews are a mainstream practice, 
commonplace within the private, non-profit and public sectors. 
Performance appraisal is specifically required by 5 U.S.C. chapter 43. 
Demonstration projects build on this requirement by increasing the link 
between pay and performance. Survey results indicate that, after 
implementation of a demonstration project, many more respondents agree 
that pay raises depend on performance. The pay-for-performance system 
is an integral component of a demonstration project's more flexible and 
responsive human resources system. The design of the NSRDEC pay-for-
performance system will increase and improve communication between the 
supervisor and the rater during the rating cycle, provide for alignment 
of performance objectives with organizational goals and objectives, and 
use features such as a workforce survey to gauge the effectiveness and 
level of support for pay for performance.
    There is a need to assure an appropriate level of challenge in 
performance objectives across the NSRDEC organization. In the current 
system, preparing performance objectives has traditionally been a 
matter between the rater and the employee. Some efforts have been made 
to review objectives within an individual directorate and training has 
been provided on what is a ``good'' objective. The demonstration 
project will serve to improve consistency across the organization. All 
supervisors will have mandatory pay-for-performance training that will 
include writing performance objectives. The NSRDEC Workforce Advisory 
Group has taken a key interest in improving performance objectives and 
will help to develop sample performance objectives. The sample 
objectives will be linked to occupational family and pay band. At the 
start of the first performance cycle, the raters within a pay pool and 
the pay pool manager will review and provide feedback on performance 
objectives. The pay pool manager will review the objectives and weights 
assigned to employees within the pay pool to verify consistency and 
appropriateness. These efforts should significantly improve consistency 
and equity in performance expectations within NSRDEC.
    Some level of subjectivity is inherent in performance appraisal 
systems. Additional features of the pay-for-performance system will 
serve to facilitate understanding of performance expectations and to 
limit bias and favoritism. Improved communication throughout the rating 
cycle serves to help build a common understanding of performance 
expectations and to make progress toward achieving those expectations. 
This, plus the structured, thorough review process, improves the 
likelihood for consistency and equity in the ratings. Major design 
features of the rating system are intended to overcome perceptions of 
favoritism and limited differentiation among ratings. The automated 
``Performance Evaluation Tool'' helps assure that objectives are in 
place on a timely basis, accomplishments are recorded, and 
communication related to performance is on-going. The pay-for-
performance system uses standard performance elements and performance 
benchmarks to evaluate employee performance that supports the mission, 
allows managers to make meaningful performance distinctions, considers 
current pay in making performance-based pay decisions and provides 
information to employees about the results of the appraisal process and 
pay decisions. At

[[Page 68450]]

the end of the rating period, employees provide their accomplishments. 
Following the initial scoring of each employee, raters in an 
organizational unit along with their next level of supervision meet to 
ensure consistency and equity of the ratings. Through discussion and 
consensus building, consistent and equitable ratings are determined 
based on similar level of performance, level of work and level of base 
pay. This improves upon the current performance appraisal system where 
there are only brief performance standards described for the fully 
successful level and rating is typically done by a supervisor with 
review and approval by a senior rater.
    Finally, adoption of the demonstration project and its pay-for-
performance system must meet the requirements of the Uniformed Services 
Employment and Reemployment Rights Act. Operating procedures will 
provide a mechanism for mobilized employees to receive a presumed 
performance rating of record that will permit base pay increases and/or 
bonuses. As is done under other pay-for-performance systems, operating 
procedures will require use of the most recent or average rating or 
record over a specified period, use of modality ratings or other 
mechanism to assure that mobilized employees who are unable to be rated 
receive the base pay increases that could have been received except for 
the mobilization.

D. Pay Pool Funding

    Two comments were received related to pay pool funding.
    Comments: A commenter recommended revising the pay pool percentage 
factor to be a minimum of 2.0 percent for base pay funding and 1 
percent for bonus. Another commenter recommended that locality pay not 
be included in the pay pool funding.
    Response: The recommendation to set a minimum of 2 percent for the 
base and 1 percent for the bonus has been accepted. The general pay 
increase (including locality pay) is not included in the pay pool 
funding.

E. Extraordinary Achievement Award

    Two comments were received related to the Extraordinary Achievement 
Recognition.
    Comments: One commenter suggested that the Extraordinary 
Achievement Recognition language be moved to a separate section since 
it is considered after and separate from the pay pool payout process. 
The same commenter also proposed that the Extraordinary Achievement 
Recognition language be revised to allow for bonus as an alternative to 
granting a base pay increase since capped employees would be precluded 
from receiving this recognition.
    Response: While an Extraordinary Achievement Recognition is 
considered after the pay pool payout process, it is not entirely 
separate from the process itself. Following the performance evaluation 
process, the pay pool manager is the agent who requests permission from 
the Personnel Management Board to grant a base pay increase higher than 
the one generated by the compensation formula for that employee. 
However, senior management is in agreement that a separate paragraph 
would clarify the intent and process for the Extraordinary Achievement 
Recognition and has moved the provision to a separate paragraph in 
III.C.9. ``Base Pay Increases and Bonuses''.
    As to the second comment, language has been added to the new 
section at III.C.9., referenced above, allowing for the option to grant 
either a base pay increase and/or a bonus as an Extraordinary 
Achievement Recognition. This permits employees whose base pay is at 
the maximum of their pay band to receive this recognition.

F. Pay

    Three comments were received related to pay setting.
    Comments: One commenter suggested relieving pay compression by 
providing additional waivers to permit full locality payment, changing 
supervisory/team leader pay adjustments and pay differentials to 
provide up to 10 percent for team leaders, and providing a pay increase 
of up to a defined amount when a person moves to a position of greater 
responsibility (reassignment) within the same pay band.
    Response: There is concern that individuals whose base pay is at 
the higher end of the GS-15 base pay range do not receive their full 
locality pay. This situation also occurs within the demonstration 
project since both DB IV and DE IV are linked to a range of GS base pay 
with a cap equivalent to the GS-15, step 10, base pay rate. However, 
increasing the maximum base pay for GS-15 equivalent pay bands will 
create a compensation imbalance with individuals in Scientific and 
Professional and Senior Executive Service positions. This locality cap 
issue is being examined at higher levels; therefore no change is 
proposed.
    The suggestion to increase the maximum for team leader base pay 
adjustments and differentials from 5 percent to 10 percent was 
considered. However, the decision was made to retain a distinction in 
the amount of adjustment or differential that could be provided for 
team leaders versus supervisors.
    Finally consideration was given to permitting a base pay increase 
upon reassignment. Since broad pay bands include positions of varying 
complexity and responsibility, a base pay increase would provide 
incentive to encourage employees to accept positions of greater 
responsibility in the same pay band. Therefore, language has been added 
at III.F.5. to address this issue and to define ``reassignment'' in 
III.E.2. A reassignment may be effected without a change in base pay. 
However, a base pay increase may be granted where a reassignment 
significantly increases the complexity, responsibility, authority or 
for other compelling reasons. Such an increase is subject to the 
specific rules established by the Personnel Management Board.

G. Awards

    One comment was received related to incentive awards.
    Comment: One commenter suggested use of an employee oversight board 
as a means to achieve consistency across the NSRDEC in the use of 
incentive awards.
    Response: Awards (such as the traditional 5 U.S.C. special act, on-
the-spot, and time-off) are not linked to the pay-for-performance 
system and will continue as a means to reward individuals and groups 
for their achievements and as an incentive for superior performance. 
Review and assessment of the use of these awards will continue 
following current practice.

H. Promotion

    Comment: One comment was received related to the minimum 
performance score required for promotion eligibility.
    Response: One commenter suggested lowering the minimum performance 
score required for eligibility for promotion. The FR requires a 
performance score of 30 or higher for promotion eligibility. But, 
scores of 10 and higher are acceptable, with scores of 21 and higher 
earning a performance payout. Setting a minimum score of 30 for 
promotion sets the requirement higher than the score for a performance 
payout and may discourage the use of scores in the 21 to 29 range. 
Accordingly, a score of 21 is set as the minimum requirement for 
promotion.

I. Period

    One comment was received related to probationary periods.

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    Comment: One commenter advised that a recent court decision limited 
the intent of the extended probationary period.
    Response: The extended probationary period applies to newly hired 
engineers and scientists. Its purpose is to allow the supervisor a 
sufficient period of time to fully evaluate an employee's performance 
and conduct. The extended probationary period of up to three years 
allows supervisors sufficient time to properly, objectively and 
completely evaluate an employee's performance and conduct. Probationary 
employees whose conduct and/or performance is unsatisfactory may be 
terminated in accordance with the procedures in 5 Code of Federal 
Regulations (CFR) part 315. However, a recent court decision has 
extended adverse action procedural and substantive protections to 
individuals defined as employees without regard to whether the 
individuals are serving a probationary period. To permit termination 
during the probationary period without using adverse action procedures, 
waivers have been added under IX. Required Waivers to Law and 
Regulation to allow for up to a three-year probationary period and to 
remove from the definition of employee, except for those with veterans' 
preference, those serving a probationary period under an initial 
appointment who do not have veterans' preference

J. Reduction in Force

    One comment was received related to reduction in force.
    Comment: One commenter expressed concern that the implementation of 
a laboratory demonstration project for NSRDEC would result in separate 
competitive areas for employees who work at various installations co-
located with NSRDEC at the Natick Soldier Systems Center (NSSC).
    Response: The implementation of a demonstration project at NSRDEC 
will not affect the determination of separate competitive areas for the 
distinct organizations located at NSSC. To the extent that the 
organizations located at NSSC are distinct organizations with separate 
command structures, there would be separate competitive areas in the 
event of a RIF in one of these organizations.

K. Conversion

    One comment was received related to conversion of interns into the 
demonstration project.
    Comment: One commenter recommended that conversion of interns into 
the demonstration project occur when the employees reach their full 
performance level for their GS position.
    Response: Interns typically receive several career promotions prior 
to reaching their full performance level. Average base pay for 
performance payouts may not provide increases as substantial as career 
promotions under the GS. Delaying conversion into the demonstration 
project pay bands until an intern reaches full performance level will 
assure that the intern's base pay is commensurate with the full 
performance level base pay. Therefore, the language at II.E. has been 
revised to reflect that interns will not convert into demonstration pay 
bands until they reach their full performance level.

3. Access to Flexibilities of Other STRLs

    Flexibilities published in this Federal Register shall be available 
for use by all STRLs listed in section 9902(c)(2) of title 5, United 
States Code, if they wish to adopt them in accordance with DoD 
Instruction 1400.37; pages 73248 to 73252 of volume 73, Federal 
Register; and the fulfilling of any collective bargaining obligations.

    Dated: December 17, 2009.
Patricia Toppings,
OSD Federal Register Liaison Officer, Department of Defense.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems With the Present System
    C. Changes Required/Expected Benefits
    D. Participating Organizations
    E. Participating Employees and Union Representation
    F. Project Design
    G. Personnel Management Board
III. Personnel System Changes
    A. Pay Banding
    B. Classification
    C. Pay for Performance
    D. Hiring Authority
    E. Internal Placement
    F. Pay Setting
    G. Employee Development
    H. Reduction-in-Force Procedures
IV. Implementation Training
    V. Conversion
    A. Conversion to the Demonstration Project
    B. Conversion Out of the Demonstration Project
    C. Personnel Administration
    D. Automation
    E. Experimentation and Revision
VI. Project Duration
VII. Evaluation Plan
    A. Overview
    B. Evaluation Model
    C. Evaluation
    D. Method of Data Collection
VIII. Demonstration Project Costs
    A. Cost Discipline
    B. Developmental Costs
IX. Required Waivers to Law and Regulation
    A. Waivers To Title 5 U.S.C.
    B. Waivers To Title 5 CFR
Appendix A: NSRDEC Employees by Duty Locations
Appendix B: Occupational Series by Occupational family
Appendix C: Performance Elements
Appendix D: Intervention Model

I. Executive Summary

    This project adopts with some modifications the STRL personnel 
management demonstration project, designed by the U.S. Army 
Communications-Electronics Command (CECOM), Research, Development and 
Engineering (RDE) organizations, with participation and review by the 
Department of the Army (DA) and DoD to the U.S. Army RDECOM, NSRDEC. 
After implementation of the CECOM RDE demonstration project, CECOM 
reorganized. Its laboratory, the Communications-Electronics Research, 
Development, and Engineering Center (CERDEC), was realigned under 
RDECOM. At the same time, the NSRDEC was also realigned under RDECOM. 
The NSRDEC includes the NSRDEC organization at the Natick Soldier 
Systems Center site, NSRDEC employees matrixed to Program/Project/
Product Management Offices (e.g., PM-Force Sustainment Systems, and PM-
Clothing and Individual Equipment) as well as NSRDEC employees with 
duty stations at other sites.
    The NSRDEC, located at Natick Soldier Systems Center (SSC) in 
Natick, Massachusetts, conducts research, technology development, 
testing and integration aimed at maximizing the individual soldier's 
survivability, sustainability, mobility, combat effectiveness and 
quality of life by treating the soldier as a system. The NSRDEC major 
product lines are: rations, clothing, equipment, shelters, airdrop 
systems, and soldier systems support items. The core capabilities of 
the NSRDEC are centered on the technologies required by the soldier and 
soldier support systems, to include biotechnology, anthropometry, 
biomechanics, consumer research, textiles, fibers and materials, food 
science, aerodynamics, and modeling and simulation. Integration of 
these technologies remains the primary focus for modernizing the future 
soldier, as well as Warrior Systems. The NSRDEC goal is simple: 
``Provide America's soldiers with the best equipment in the world.'' To 
achieve this goal, the NSRDEC organization must be able to hire, retain 
and continually motivate enthusiastic, innovative, and highly-educated 
scientists and engineers, supported by skilled business management and 
administrative

[[Page 68452]]

professionals as well as a skilled administrative and technical support 
staff.
    The goal of the project is to enhance the quality and 
professionalism of the NSRDEC workforce through improvements in the 
efficiency and effectiveness of the human resource system. The project 
interventions will strive to achieve the best workforce for the 
mission, adjust the workforce for change, and improve workforce 
satisfaction. This demonstration project extends the CERDEC 
demonstration project to NSRDEC. The CERDEC project was built on the 
concepts, and uses much of the same language, as the demonstration 
projects developed by the Army Research Laboratory (ARL), the Aviation 
and Missile Research, Development, and Engineering Center (AMRDEC), the 
Navy's ``China Lake,'' and the National Institute of Standards and 
Technology (NIST). The results of the project will be evaluated within 
5 years of implementation.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness 
of DoD STRLs can be enhanced by expanding opportunities available to 
employees and by allowing greater managerial control over personnel 
functions through a more responsive and flexible personnel system. 
Federal laboratories need more efficient, cost effective, and timely 
processes and methods to acquire and retain a highly creative, 
productive, educated, and trained workforce. This project, in its 
entirety, attempts to improve employees' opportunities and provide 
managers, at the lowest practical level, the authority, control, and 
flexibility needed to achieve the highest quality organization and hold 
them accountable for the proper exercise of this authority within the 
framework of an improved personnel management system.
    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results are analyzed, and conclusions are reached on how the system is 
working. The provisions of this project plan will not be modified, or 
extended to individuals or groups of employees not included in the 
project plan without the approval of the ODUSD(CPP). The provisions of 
DoDI 1400.37, are to be followed for any modifications, adoptions, or 
changes to this demonstration project plan.

B. Problems With the Present System

    The current Civil Service General Schedule (GS) system has existed 
in essentially the same form since the 1920's. Work is classified into 
one of fifteen overlapping pay ranges that correspond with the fifteen 
grades. Base pay is set at one of those fifteen grades and the ten 
interim steps within each grade. The Classification Act of 1949 rigidly 
defines types of work by occupational series and grade, with very 
precise qualifications for each job. This system does not quickly or 
easily respond to new ways of designing work and changes in the work 
itself.
    The performance management model that has existed since the passage 
of the Civil Service Reform Act has come under extreme criticism. 
Employees frequently report there is inadequate communication of 
performance expectations and feedback on performance. There are 
perceived inaccuracies in performance ratings with general agreement 
that the ratings are inflated and often unevenly distributed by grade, 
occupation and geographic location.
    The need to change the current hiring system is essential as NSRDEC 
must be able to recruit and retain scientific, engineering, 
acquisition, skilled technical, and other professional, administrative 
and support employees. The NSRDEC must be able to compete with the 
private sector for the best talent and be able to make job offers in a 
timely manner with the attendant bonuses and incentives to attract high 
quality employees.
    Finally, current limitations on training, retraining and otherwise 
developing employees make it difficult to correct skill imbalances and 
to prepare current employees for new lines of work to meet changing 
missions and emerging technologies.

C. Changes Required/Expected Benefits

    The primary benefit expected from this demonstration project is 
greater organizational effectiveness through increased employee 
satisfaction. The long-standing Department of the Navy ``China Lake'' 
and NIST demonstration projects have produced impressive statistics on 
increased job satisfaction and quality of employees versus that for the 
Federal workforce in general. This project will demonstrate that a 
human resource system tailored to the mission and needs of the NSRDEC 
workforce will facilitate:
    (1) Increased quality in the workforce and resultant products,
    (2) Increased timeliness of key personnel processes,
    (3) Increased retention of ``excellent performers,''
    (4) Increased success in recruitment of personnel with critical 
skills,
    (5) Increased management authority and accountability,
    (6) Increased satisfaction of customers, and
    (7) Increased workforce satisfaction with the personnel management 
system.
    An evaluation model was developed for the Director of Defense, 
Research and Engineering (DDR&E) in conjunction with STRLs, service 
representatives, and OPM. The model will measure the effectiveness of 
this demonstration project, as modified in this plan, and will be used 
to measure the results of specific personnel system changes.

D. Participating Organizations

    NSRDEC is comprised of the NSRDEC at the Natick Soldier System 
Center, Natick, Massachusetts, NSRDEC employees matrixed to Program 
Management offices, and NSRDEC employees geographically dispersed at 
the locations shown in Appendix A. It should be noted that some sites 
currently employ fewer than 10 people and that the sites may change 
should NSRDEC reorganize or realign. Successor organizations will 
continue coverage in the demonstration project.

E. Participating Employees and Union Representation

    This demonstration project will cover approximately 700 NSRDEC 
civilian employees under title 5 U.S.C. in the occupations listed in 
Appendix B. The project plan does not cover members of the Senior 
Executive Service (SES), Scientific and Professional (ST) employees, 
Federal Wage System (FWS) employees, employees presently covered by the 
Defense Civilian Intelligence Personnel System (DCIPS), DA and Army 
Command centrally funded interns and students employed under the 
Student Career Experience Program (SCEP). Employees on temporary 
appointments will not be covered by the demonstration project.
    Department of Army, Army Command centrally funded, and local 
interns (hired prior to implementation of the project) will not be 
converted to the demonstration project until they reach their full 
performance level. They will also continue to follow the Total Army 
Performance Evaluation System (TAPES) performance appraisal system. 
Local interns hired after implementation of the project will be covered 
by all terms of the demonstration project.
    The National Association of Government Employees (NAGE) Local

[[Page 68453]]

R1-34 represents the majority of NSRDEC employees. Of those employees 
assigned to NSRDEC, approximately 85 percent are represented by NAGE. 
NSRDEC has maintained on-going communication with the Union regarding 
its intent to pursue approval for a laboratory personnel demonstration 
project. NSRDEC is continuing to inform the Union, and its Executive 
Vice President is participating as a member of the Workforce Advisory 
Group. Negotiations will begin after publication of this Federal 
Register. NSRDEC will continue to fulfill its obligation to consult 
and/or negotiate with all labor organizations in accordance with 5 
U.S.C. 4703(f) and 7117.

F. Project Design

    NSRDEC has been a DoD STRL since June 1995. This status authorized 
NSRDEC to participate in all of the STRL initiatives, to include the 
authority to carry out personnel demonstration projects. NAGE Local R1-
34 actively participated in the development of an earlier personnel 
demonstration project (PDP). However, as a result of DoD development of 
a best practices model and the design and implementation of the 
National Security Personnel System (NSPS), the proposal was not acted 
upon. Subsequently, in 2005 the NSRDEC submitted a request to adopt the 
CERDEC demonstration project. The CERDEC demonstration project was the 
most recently approved demonstration project, used an inclusive 
approach for its design, and benefitted from the experiences of prior 
STRL demonstration projects. After the enactment of the National 
Defense Authorization Act for Fiscal Year 2008 provided for full 
implementation of the personnel demonstration project, the DoD 
announced NSRDEC's intent to adopt the CERDEC demonstration project in 
73 FR 73248, December 2, 2008.

G. Personnel Management Board

    NSRDEC has created a Personnel Management Board to oversee and 
monitor the fair, equitable, and consistent implementation of the 
provisions of the demonstration project to include establishment of 
internal controls and accountability. Members of the board are senior 
leaders appointed by the NSRDEC Director. As needed, ad hoc members 
will serve in an advisory capacity to the Board.
    The board will execute the following:
    (1) Determine the composition of the pay-for-performance pay pools 
in accordance with the guidelines of this proposal and internal 
procedures;
    (2) Review operation of pay pools and provide guidance to pay pool 
managers;
    (3) Oversee disputes in pay pool issues;
    (4) Formulate and execute the civilian pay budget;
    (5) Manage the awards pools;
    (6) Determine hiring and promotion base pay as well as exceptions 
to pay-for-performance base pay increases;
    (7) Conduct classification review and oversight, monitoring and 
adjusting classification practices and deciding board classification 
issues;
    (8) Approve major changes in position structure;
    (9) Address issues associated with multiple pay systems during the 
demonstration project;
    (10) Establish Standard Performance Elements and Benchmarks;
    (11) Assess the need for changes to demonstration project 
procedures and policies;
    (12) Review requests for Supervisory/Team Leader Base Pay 
Adjustments and provide recommendations to the appropriate Center 
Director;
    (13) Ensure in-house budget discipline;
    (14) Manage the number of employees by occupational family and pay 
band;
    (15) Develop policies and procedures for administering 
Developmental Opportunity Programs;
    (16) Ensure that all employees are treated in a fair and equitable 
manner in accordance with the policies, regulations and guidelines 
covering this demonstration project; and,
    (17) Monitor the evaluation of the project.

III. Personnel System Changes

A. Pay Banding

    The design of the pay banding system takes advantage of the many 
reviews performed by DA and DoD. The design has the benefit of being 
preceded by exhaustive studies of pay banding systems currently 
practiced in the Federal sector, to include those practiced by the 
Navy's ``China Lake'' experiment and NIST. The pay banding system will 
replace the current GS structure. Currently the fifteen grades of the 
GS are used to classify positions and, therefore, to set base pay. The 
GS covers all white-collar work--administrative, technical, clerical 
and professional. Changes in this rigid structure are required to allow 
flexibility in hiring, developing, retaining, and motivating the 
workforce.
1. Occupational Families
    Occupations with similar characteristics will be grouped together 
into one of three occupational families with pay band levels designed 
to facilitate pay progression. Each occupational family will be 
composed of pay bands corresponding to recognized advancement and 
career progression expected within the occupations. These pay bands 
will replace individual grades and will not be the same for each 
occupational family. Each occupational family will be divided into 
three to five pay bands with each pay band covering the same pay range 
now covered by one or more GS grades. Employees track into an 
occupational family based on their current series as provided in 
Appendix B. Upon conversion into the demonstration project, NSRDEC 
employees are initially assigned to the highest band in which their 
grade fits. For example, a Management Analyst GS-343-12 in the Business 
and Technical Family is assigned to Pay Band III as illustrated in 
Figure 1. The upper and lower pay rate for base pay of each band is 
defined by the GS rate for the grade and step as indicated in Figure 1 
except for Pay Band V of the Engineering and Science occupational 
family (refer to III.A.3.). Comparison to the GS grades was used in 
setting the upper and lower base pay dollar limits of the pay band 
levels. However, once employees are moved into the demonstration 
project, GS grades will no longer apply. The current occupations have 
been examined, and their characteristics and distribution have served 
as guidelines in the development of the following three occupational 
families:
    E&S (Pay Plan DB): This occupational family includes technical 
professional positions, such as engineers, physicists, chemists, 
mathematicians, operations research analysts and computer scientists. 
Specific course work or educational degrees are required for these 
occupations. Five bands have been established for the E&S occupational 
family:
    (1) Band I is a student trainee track covering GS-1, step 1 through 
GS-4, step 10.
    (2) Band II is a developmental track covering GS-5, step 1 through 
GS-11, step 10.
    (3) Band III * is a full-performance technical track covering GS-
12, step 1 through GS-14, step 10. Some first-level supervisory 
positions may also be included in this band.
    (4) Band IV * includes both senior technical positions along with 
supervisors-managers covering GS-14, step 1 through GS-15, step 10.
    (5) Band V is a senior scientific-technical manager. The pay range 
is as

[[Page 68454]]

follows: minimum base pay is 120 percent of minimum base pay of GS-15; 
maximum base pay is Level IV of the Executive Schedule (EX IV); and 
maximum adjusted base pay (adjusted base pay is the base rate plus 
locality or staffing supplement, as appropriate) is Level III of the 
Executive Schedule (EX III).
    * Bands III and IV overlap at the end and start points. These two 
bands have been designed following a feature used by the Navy's ``China 
Lake'' project. Upon conversion into the demonstration project, NSRDEC 
employees in the E&S family currently at grade GS-14 are assigned to 
Band IV.
    Business & Technical (B&T) (Pay Plan DE): This occupational family 
includes such positions as program acquisition specialists, equipment 
specialists, engineering and electronics technicians, finance, 
accounting, administrative, and management analysis. Employees in these 
positions may or may not require specific course work or educational 
degrees. Four bands have been established for the B&T occupational 
family:
    (1) Band I is a student trainee track covering GS-1, step 1 through 
GS-4, step 10.
    (2) Band II is a developmental track covering GS-5, step 1 through 
GS-11, step 10.
    (3) Band III is a full performance track covering GS-12, step 1 
through GS-13, step 10.
    (4) Band IV is a senior technical/manager track covering GS-14, 
step 1 through GS-15, step 10.
    General Support (GEN) (Pay Plan DK): This occupational family is 
composed of positions for which specific course work or educational 
degree is not required. Clerical work usually involves the processing 
and maintenance of records. Assistant work requires knowledge of 
methods and procedures within a specific administrative area. This 
family includes such positions as secretaries, office automation 
clerks, and budget/program/computer assistants. Three bands have been 
established for the GEN occupational family:
    (1) Band I includes entry-level positions covering GS-1, step 1 
through GS-4, step 10.
    (2) Band II includes full-performance positions covering GS-5, step 
1 through GS-8, step 10.
    (3) Band III includes senior technicians/assistants/secretaries 
covering GS-9 step 1 through step 10.
2. Pay Band Design
    The pay bands for the occupational families and how they relate to 
the current GS framework are shown in Figure 1.

                                                                                    Figure 1--Pay Band Chart
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Equivalent GS grades
       Occupational family        --------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  I                              II                              III                             IV                              V
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
E&S..............................  GS-01--GS-04                    GS-05--GS-11                    GS-12--GS-14                    GS-14--GS-15                    >GS-15
Business & Technical.............  GS-01--GS-04                    GS-05--GS-11                    GS-12--GS-13                    GS-14--GS-15                    .............................
General Support..................  GS-01--GS-04                    GS-05--GS-08                    GS-9                            ..............................  .............................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Employees will be converted into the occupational family and pay 
band that corresponds to their GS/GM series and grade. The Engineering 
and Science occupational family has an overlapping pay band. GS-14 
Engineers and Scientists will convert into Pay Band IV. Each employee 
converted to the demonstration project is assured, upon conversion, an 
initial place in the system without loss of pay. New hires will 
ordinarily be placed at the lowest base pay rate in a pay band. 
Exceptional qualifications, specific organizational requirements, or 
other compelling reasons may lead to a higher entrance base pay within 
a band. As the rates of the GS are increased due to the annual general 
pay increases, the upper and lower base pay rates of the pay bands will 
also increase. Since pay progression through the bands depends directly 
on performance, there will be no scheduled Within-Grade Increases 
(WIGIs) or Quality Step Increases (QSIs) for employees once the pay 
banding system is in place. Special rate schedules will no longer be 
applicable to demonstration project employees. Special provisions have 
been included to ensure no loss of pay upon conversion. (See III. E.9, 
Staffing Supplements).
3. Pay Band V
    The pay banding plan expands the pay banding concept used at 
``China Lake'' and NIST by creating Pay Band V for the Engineering and 
Science occupational family. This pay band is designed for Senior 
Scientific Technical Managers (SSTM). The current definitions of Senior 
Executive Service (SES) and Scientific and Professional (ST) positions 
do not fully meet the needs of the NSRDEC.
    The SES designation is appropriate for executive level managerial 
positions whose classification exceeds GS-15. The primary competencies 
of SES positions relate to supervisory and managerial responsibilities. 
Positions classified as ST are designed for bench research scientists 
and engineers. These positions require a very high level of technical 
expertise and have little or no supervisory responsibilities.
    The NSRDEC has positions that may warrant classification above 
grade GS-15 because of their technical expertise requirements. These 
positions have characteristics of both SES and ST classifications. Most 
of these positions are responsible for supervising other GS-15 
positions, including lower level supervisors, and non-supervisory 
engineers and scientists, and in some cases ST positions. The 
supervisory and managerial requirements exceed those appropriate for ST 
positions.
    Management considers the primary requirement for these positions to 
be knowledge of and expertise in the specific scientific and technology 
areas related to the mission of their organizations, rather than the 
executive leadership qualifications that are characteristic of the SES. 
Historically, incumbents of these positions have been recognized within 
the community as scientific and engineering leaders who possess strong 
managerial and supervisory abilities. Therefore, although some of these 
employees have scientific credentials that might compare favorably with 
ST criteria, classification of these positions as STs is not an option 
because the managerial and supervisory responsibilities cannot be 
ignored.
    Pay Band V will apply to a new category of positions designated as 
Senior Scientific Technical Managers (SSTM). Positions so designated 
will include those requiring scientific/engineering technical expertise 
and full managerial and supervisory authority. Their scientific/
engineering technical expertise and responsibilities warrant 
classification above the GS-15 level.

[[Page 68455]]

    Current GS-15 positions will convert into the demonstration project 
at Pay Band IV. After conversion these positions will be reviewed 
against established criteria to determine if the positions should be 
reclassified to Pay Band V. Other positions possibly meeting criteria 
for designation as SSTM will be reviewed on a case-by-case basis. The 
pay range for SSTM positions is: minimum base pay is 120 percent of 
minimum base pay of GS-15; maximum base pay is Level IV of the 
Executive Schedule (EX IV); and maximum adjusted base pay is Level III 
of the Executive Schedule (EX III).
    Vacant SSTM positions will be filled competitively to ensure that 
selectees are preeminent technical leaders in specialty fields who also 
possess substantial managerial and supervisory abilities. Panels will 
be created to assist in filling SSTM positions. Panel members typically 
will be SES members, ST employees and later those designated as SSTMs. 
In addition, General Officers and recognized technical experts from 
outside the NSRDEC may also serve as appropriate. The panel will apply 
criteria developed from the OPM Research Grade Evaluation Guide for 
positions exceeding the GS-15 level and other OPM guidance related to 
positions exceeding the GS-15 level. The purpose of the panel is to 
ensure impartiality, breadth of technical expertise and a rigorous and 
demanding review.
    SSTM positions will be subject to limitations imposed by DoD. SSTM 
positions will be established only in a STRL that employs scientists, 
engineers, or both. Incumbents of these positions will work primarily 
in their professional technical capacity on research and development 
and secondarily will perform managerial or supervisory duties.
    The final component of Pay Band V is the management of all Pay Band 
V assets. Specifically, this authority will be exercised at the DA 
level, and includes the following: authority to classify, create, or 
abolish positions within the limitations imposed by DoD; recruit and 
reassign employees in this pay band; set pay and appraise performance 
under this project's pay-for-performance system.

B. Classification

1. Occupational Series
    The present GS classification system has over 400 occupational 
series, which are divided into 23 occupational groupings. NSRDEC 
currently has positions in approximately 65 occupational series that 
fall into 14 occupational groupings. All positions listed in Appendix B 
will be in the classification structure. Provisions will be made for 
including other occupations in response to changing missions.
2. Classification Standards and Position Descriptions
    NSRDEC will use CERDEC's fully automated classification system 
modeled after the Navy's ``China Lake'' and ARL automated systems. ARL 
developed a web-based automated classification system that can create 
standardized, classified position descriptions under the new pay 
banding system in a matter of minutes. The present system of OPM 
classification standards will be used for the identification of proper 
series and occupational titles of positions within the demonstration 
project. Current OPM position classification standards will not be used 
to grade positions in this project. However, the grading criteria in 
those standards will be used as a framework to develop new and 
simplified standards for the purpose of pay band determinations. The 
objective is to record the essential criteria for each pay band within 
each occupational family by stating the characteristics of the work, 
the responsibilities of the position, and the competencies required. 
New position descriptions will replace the current DA job descriptions. 
The classification standard for each pay band will serve as an 
important component in the new position description, which will also 
include position-specific information, and provide data element 
information pertinent to the job. The computer-assisted process will 
produce information necessary for position descriptions. The new 
descriptions will be easier to prepare, minimize the amount of writing 
time and make the position description a more useful and accurate tool 
for other personnel management functions.
    Specialty work codes (narrative descriptions) will be used to 
further differentiate types of work and the competencies required for 
particular positions within an occupational family and pay band. Each 
code represents a specialization or type of work within the occupation.
3. Fair Labor Standards Act
    Fair Labor Standards Act (FLSA) exemption and non-exemption 
determinations will be consistent with criteria found in 5 CFR part 
551. All employees are covered by the FLSA unless they meet the 
criteria for exemption. The duties and responsibilities outlined in the 
classification standards for each pay band will be compared to the FLSA 
criteria. As a general rule, the FLSA status can be matched to 
occupational family and pay band as indicated in Figure 2. For example, 
positions classified in Pay Band I of the E&S occupational family are 
typically nonexempt, meaning they are covered by the overtime 
entitlements prescribed by the FLSA. An exception to this guideline 
includes supervisors/managers whose primary duty meets the definitions 
outlined in the OPM GS Supervisory Guide. Therefore, supervisors/
managers in any of the pay bands who meet the foregoing criteria are 
exempt from the FLSA. Supervisors with classification authority will 
make the determinations on a case-by-case basis by comparing assigned 
duties and responsibilities to the classification standards for each 
pay band and the 5 CFR part 551 FLSA criteria. Additionally, the advice 
and assistance of the Civilian Personnel Advisory Center, Northeast 
Region, Civilian Human Resources Agency Center (CPAC/CHRA) will be 
obtained in making determinations. The benchmark position descriptions 
will not be the sole basis for the determination. Basis for exemption 
will be documented and attached to each position description. Exemption 
criteria will be narrowly construed and applied only to those employees 
who clearly meet the spirit of the exemption. Changes will be 
documented and provided to the CPAC/CHRA.

                          Figure 2--FLSA Status
                               [Pay bands]
------------------------------------------------------------------------
         Occupational family             I      II    III     IV     V
------------------------------------------------------------------------
E&S..................................      N    N/E      E      E      E
B&T..................................      N    N/E      E      E
GEN..................................      N      N     E
------------------------------------------------------------------------
N--Non-Exempt from FLSA; E--Exempt from FLSA.
N/E--Exemption status determined on a case-by-case basis.


    Note:  Although typical exemption status under the various pay 
bands is shown in the above table, actual FLSA exemption 
determinations are made on a case-by-case basis.

4. Classification Authority
    The NSRDEC Director will have delegated classification authority 
and may, in turn, re-delegate this authority to appropriate levels. 
Position descriptions will be developed to assist managers in 
exercising delegated position classification authority. Managers will 
identify the occupational

[[Page 68456]]

family, job series, functional code, specialty work code, pay band 
level, and the appropriate acquisition codes. Personnel specialists 
will provide ongoing consultation and guidance to managers and 
supervisors throughout the classification process. These decisions will 
be documented on the position description.
5. Classification Appeals
    Classification appeals under this demonstration project will be 
processed using the following procedures: An employee may appeal the 
determination of occupational family, occupational series, position 
title, and pay band of his/her position at any time. An employee must 
formally raise the area of concern to supervisors in the immediate 
chain of command, either verbally or in writing. If the employee is not 
satisfied with the supervisory response, he/she may then appeal to the 
DoD appellate level. Appeal decisions rendered by DoD will be final and 
binding on all administrative, certifying, payroll, disbursing, and 
accounting officials of the government. Classification appeals are not 
accepted on positions which exceed the equivalent of a GS-15 level. 
Time periods for cases processed under 5 CFR part 511 apply.
    An employee may not appeal the accuracy of the position 
description, the demonstration project classification criteria, or the 
pay-setting criteria; the assignment of occupational series to the 
occupational family; the propriety of a pay schedule; or matters 
grievable under an administrative or negotiated grievance procedure, or 
an alternative dispute resolution procedure.
    The evaluations of classification appeals under this demonstration 
project are based upon the demonstration project classification 
criteria. Case files will be forwarded for adjudication through the 
CPAC/CHRA providing personnel service and will include copies of 
appropriate demonstration project criteria.

C. Pay for Performance

1. Overview
    The purpose of the pay-for-performance system is to provide an 
effective, efficient, and flexible method for assessing, compensating, 
and managing the NSRDEC workforce. It is essential for the development 
of a highly productive workforce and to provide management at the 
lowest practical level, the authority, control, and flexibility needed 
to achieve a quality organization and meet mission requirements. Pay 
for performance allows for more employee involvement in the assessment 
process, strives to increase communication between supervisor and 
employee, promotes a clear accountability of performance, facilitates 
employee career progression, and provides an understandable and 
rational basis for pay changes by linking pay and performance.
    The pay-for-performance system uses annual performance payouts that 
are based on the employee's total performance score rather than within-
grade increases, quality step increases, promotions from one grade to 
another where both grades are now in the same pay band (i.e., there are 
no within-band promotions) and performance awards. The normal rating 
period will be one year. The minimum rating period will be 120 days. 
Pay-for-performance payouts can be in the form of increases to base pay 
and/or in the form of bonuses that are not added to base pay but rather 
are given as a lump sum bonus. Other awards such as special acts, time-
off awards, etc., will be retained separately from the pay-for-
performance payouts.
    The system will have the flexibility to be modified, if necessary, 
as more experience is gained under the project.
2. Performance Objectives
    Performance objectives define a target level of activity, expressed 
as a tangible, measurable objective, against which actual achievement 
can be compared. These objectives will specifically identify what is 
expected of the employee during the rating period and will typically 
consist of three to ten results-oriented statements. The employee and 
his/her supervisor will jointly develop the employee's performance 
objectives at the beginning of the rating period. These are to be 
reflective of the employee's duties/responsibilities and pay band along 
with the mission/organizational goals and priorities. Objectives will 
be reviewed annually and revised upon changes in pay reflecting 
increased responsibilities commensurate with pay increases. Use of 
generic one-size-fits-all objectives will be avoided, as performance 
objectives are meant to define an individual's specific 
responsibilities and expected accomplishments. In contrast, performance 
elements as described in the next paragraph will identify generic 
performance characteristics, against which the accomplishment of 
objectives will be measured. As a part of this demonstration project, 
training focused on overall organizational objectives and the 
development of performance objectives will be held for both supervisors 
and employees. Performance objectives may be jointly modified, changed 
or deleted as appropriate during the rating cycle. As a general rule, 
performance objectives should only be changed when circumstances 
outside the employee's control prevent or hamper the accomplishment of 
the original objectives. It is also appropriate to change objectives 
when mission or workload shifts occur.
3. Performance Elements
    Performance elements define generic performance characteristics 
that will be used to evaluate the employee's success in accomplishing 
his/her performance objectives. The use of generic characteristics for 
scoring purposes helps to ensure comparable scores are assigned while 
accommodating diverse individual objectives. This pay-for-performance 
system will utilize those performance elements provided in Appendix C. 
All elements are critical. A critical performance element is defined as 
an attribute of job performance that is of sufficient importance that 
performance below the minimally acceptable level requires remedial 
action and may be the basis for removing an employee from his/her 
position. Non-critical elements will not be used. Each of the 
performance elements will be assigned a weight, which reflects its 
importance in accomplishing an individual's performance objectives. A 
minimum weight is set for each performance element. The sum of the 
weights for all of the elements must equal 100.
    A single set of performance elements will be used for evaluating 
the annual performance of all NSRDEC personnel covered by this plan. 
This set of performance elements may evolve over time, based on 
experience gained during each rating cycle. This evolution is essential 
to capture the critical characteristics the organization encourages in 
its workforce toward meeting individual and organizational objectives. 
This is particularly